The Corporate Transparency Act (CTA) was passed in early 2021 and requires U.S. companies to report their "beneficial owners"—those who own or control at least 25% of the company—to the Financial Crimes Enforcement Network (FinCEN). This aims to combat illicit activities like money laundering and terrorism financing.(1)(2)(3)

Key details for business owners:

• Who must report: Most U.S. corporations and LLCs must file, unless exempt (e.g., large companies, banks, or nonprofits). 
• Penalties: Fines up to $500 per day for non-compliance, and criminal penalties up to $10,000 and/or two years in prison.
• Deadlines:some text
  • Existing companies must file by January 1, 2025.
  • New companies (formed after January 1, 2024) must file within 90 days.

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Not sure if you need to file?

More than 95% of businesses are expected to have to file.

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Who needs to file?

If you own a small business, chances are you need to file a Beneficial Ownership Information (BOI) report with FinCEN.

• Most corporations (C-corps, S-corps)
• LLCs
• most Home Owners Associations (HOAs) and similar entities

Most businesses must file unless they are publicly traded, government-owned, or highly regulated (such as banks or insurance companies).

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Who is exempt? 

Here are the main exemptions from the Corporate Transparency Act's beneficial ownership reporting requirements:

1. Large Operating Companies: Companies with more than 20 full-time U.S. employees, over $5 million in gross receipts or sales, and a physical presence in the U.S.
2. Government Entities: Entities created by government bodies or those exercising governmental authority.
3. Publicly Traded Companies: Companies with registered securities under Section 12 of the Securities Exchange Act of 1934.
4. Banks and Credit Unions: Including bank holding companies and savings/loan holding companies.
5. Investment Companies/Advisors: Registered with the SEC.
6. Insurance Companies: Regulated by state insurance commissioners.
7. Charitable Organizations: Non-profits under 501(c), political organizations, and certain trusts.
8. Inactive Entities: Entities over 1 year old, not in active business, with no significant transactions (no ownership changes or payments over $1,000), and no assets.
9. Certain Regulated Entities: Brokers, dealers, exchanges, and other financial entities regulated under federal laws.
10. Other Classes: Entities exempted by future Treasury regulations, where reporting would not serve public interest or national security​.

If your entity falls into any of these categories, it may be exempt from filing.

See p. 11 of FinCEN’s Small Entity Compliance Guide or FinCEN FAQ’s for lots more detail.

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What you need to file your BOI report

Figure out who is a Beneficial Owner

If you’re the only one who owns or controls your business, the good news is this is easy. The beneficial owner is you!

If there are multiple people who own or make decisions related to a business, think about who makes the bulk of decisions (25% or more). Do your best to identify the major decision makers. These are the beneficial owners. 

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FinCEN says: a beneficial owner is an individual who either directly or indirectly: 

• exercises substantial control over the reporting company or
• owns or controls at least 25% of the reporting company’s ownership interests(1)

This person benefits from the company's profits and has a say in how it operates, even if they're not publicly listed as an official owner. For example, someone behind the scenes pulling the strings or having a large share of the company would be considered a beneficial owner​​.

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You’ll need 2 documents

ID for all beneficial owners

For BOI reporting, FinCEN accepts the following types of ID:

• U.S. passport (non expired)

• State or local government-issued ID (non expired)

• U.S. driver’s license (non expired)

• Foreign passport (non expired) if no U.S. IDs are available.

Formation documents

 You’ll need business formation documents, such as articles of incorporation for corporations or certificates of formation for LLCs. These documents show your company’s creation through state or Tribal filing and may help confirm ownership details.

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You’ll need just a few pieces of information from these documents, including:

• Legal entity name

• Formation date

• Where you filed your original paperwork (Jurisdiction - state or tribe)

• Physical address of your US business (headquarters or physical location)

• If your entity was formed after January 1, 2024, you also need identity information on individuals (humans!) who created or registered the entity. This is the person who filed your original paperwork.

How long will this take?

FinCEN's portal is available, and they say people should expect to spend 90+ minutes depending on the complexity.

SnapFile's submission portal guides you through gathering necessary documents and inputting the correct information. We integrate directly with government systems, ensuring your report reaches FinCEN safely and on time. You even get an immediate response from FinCEN's system, letting you know if your report was accepted. The process should take around 10 minutes for most people.